Filecoin is expected to raise millions in an initial coin offering.

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A blockchain-based cloud storage technology called Filecoin has already raised $52 million from investors. The company is poised to raise millions more on Thursday when it begins selling units of its bitcoin-like cryptocurrency to a larger set of wealthy investors.

Filecoin aims to disrupt conventional cloud-based storage platforms from Amazon and others. If it succeeds, the technology could be worth billions of dollars. But the company will need to overcome some significant hurdles first.

First and foremost, Filecoin's technology doesn't actually exist yet. The Filecoin team has done extensive research and planning, producing a series of white papers describing the technology it's building. But an actual, working Filecoin network is still months away. When it launches, Filecoin will compete with rival blockchain storage networks, including Sia, which has been available to the public for two years.

"Filecoin currently is just a white paper," Sia co-founder David Vorick told us earlier this week.

The broader challenge for Filecoin and its more established competitors will be convincing customers that it's safe to entrust their data to a decentralized, blockchain-based storage network at all. In theory, blockchain-based storage could offer significant advantages, including lower costs and higher reliability. The technology is likely to be most appealing for people looking for low-cost, long-term data storage.

But the technology is going to need at least a few years to mature to the point where it's ready for mainstream use. The Sia network has relatively limited capacity, and, right now, using the technology involves significant hassles—including acquiring the Siacoin cryptocurrency on a digital currency exchange and configuring and running complex Sia client software.

How to use a blockchain to create decentralized storage

The basic strategy is for a service provider to sign a contract promising to store the data and post collateral backing up the promise. If a service provider fails to keep its end of the bargain, it forfeits the collateral. The idea is reasonable in theory, but it's not really practical with conventional payment networks backed up by the conventional legal system. The system would easily get bogged down in costly disputes between service providers and their disgruntled customers.

But a blockchain provides an elegant solution. Here's how it works: when a storage contract begins, the service provider posts the root of a data structure called a Merkle tree that serves as a unique fingerprint for the customer's data.

This hierarchical data structure allows the service provider to provide a succinct cryptographic proof that it has any particular 64-byte chunk of the file. At regular intervals, the Sia network chooses one of the 64-byte chunks using a pseudorandom function based on the most recent block of the Sia blockchain. The service provider must respond by publishing the sequence of hashes that charts a path up the tree from that data block to the already-published Merkle tree root. This constitutes a cryptographic proof that the service provider still has that chunk of data stored on its servers.

A dishonest service provider can't predict or control which chunk of data will be chosen in each round of the challenge, so the only way to consistently respond to the challenges is to store the entire file. Service providers who fail to supply a proof too many times lose their collateral. The network can enforce these rules without help from the client because you only need to know the Merkle tree's root hash to verify the correctness of a proof.

Rewards, penalties, and redundancy

Rewards and penalties on the Sia network are denominated in Siacoins, the cryptocurrency that powers the Sia network. Users buy Siacoins on an exchange, then spend them to purchase storage from service providers. Service providers post collateral in Siacoins and automatically get them back if they fulfill their contracts and furnish the required cryptographic proof to the Sia blockchain. As on the Bitcoin network, the Sia network is run by miners who earn new Siacoins as a reward for participating in the network's transaction-clearing process to build the Sia blockchain.

Of course, some providers will default on their commitments anyway, but the customer can deal with this by storing redundant copies of the data with different providers. A naïve approach would be to store, say, five copies of each file with five different hosts. A technique called erasure coding, which splits a file up into multiple chunks and allows any chunk to be reconstructed from others, allows clients to do much better than that.

Sia cofounder David Vorick tells Ars that most Sia users currently use a redundancy factor of three—meaning that three bits are stored for each bit of the underlying data. But Vorick argues that customers will eventually be able to do much better, achieving very high reliability with a redundancy factor as low as 1.5. For example, a particular file might be split into 60 pieces and stored with 60 different hosts. The customer would be able to recover the file so long as at least 40 of those 60 hosts remain online.

All these details have to be handled on the client side of the network, since the whole point of the system is to avoid having to trust any single service provider. If you want to store data on the Sia network, you'll need to acquire Siacoins from a digital exchange—most likely buying the more widely traded Bitcoins first and then trading those in for Siacoins. Then you'll need to download the Siacoin client software, which has options for creating storage contracts, uploading files, and so forth.

Filecoin aims to be better blockchain storage

Filecoin is based on the same basic idea as Sia, but it aims to make a few significant enhancements. One is a new algorithm for mining.

Mining is the collaborative process for building a blockchain. Sia uses an approach called proof-of-work that was pioneered by Bitcoin. Computers compete to solve a difficult mathematical problem, with the winner getting to add a new block to the blockchain and reward itself with new Siacoins. That extra computation isn't necessary to actually process Bitcoin transactions—it's essentially just make-work to prevent Sybil attacks and secure the network. And the amount of energy consumed by the Bitcoin network has grown steadily along with the price of bitcoins. The Bitcoin network's annual energy consumption measures in the terawatt-hour range.

Filecoin aims to eliminate this waste by making storage, rather than computing power, the basis for influence on the Filecoin network. While Bitcoin and Sia miners stockpile ever more powerful computing hardware, Filecoin miners will amass more and more hard drives—hard drives that can actually be put to work storing user data.

Filecoin also aims to offer self-healing capabilities that Sia lacks. When a host drops off the Sia network and takes part of a client's data with it, it's a good practice for the client to reconstruct the missing data from other copies (using the erasure coding techniques mentioned above), contract with a new host, and upload the reconstructed data. That means that Sia client software needs to log onto the network about once a week to check if any of their data needs this kind of repair.

Filecoin aims to make this unnecessary by offering automatic self-healing capabilities in the network itself. Under the Filecoin protocol, if a host disappears from the network—or fails to prove that it's still storing data it has promised to store—the network will notice and post a contract for a new host to reconstruct and store the missing data.

That's possible because Filecoin uses an encoding scheme that allows anyone to reconstruct missing data. That's different from the Sia network, where the encryption and encoding of the data is done by the client, which means only the client can reconstruct missing data.

In contrast, Sia is designed for hosts with uptimes in the 95- to 98-percent range. Data is spread across many servers in a way that allows it to be re-constructed even if a few of them fail. And that means Sia hosts don't have to spend a lot of money on redundant power supplies or 24/7 support. Vorick says that makes running a Sia storage service radically cheaper.

Why would Amazon not be able to do this? They have lots and lots of servers, so they could spread out the data in the same way, could they not?

This seems to be the only advantage of this storage system amidst many disadvantages.

There's another brand of snake oil for the gullible.You can hear the buzz-words being thrown around by the spruikers to pull the punters in and relieve them of their cash.Old Barnham was right, but these days it's more like one a second.

I have a whole bunch of servers I rent because I need high CPU performance and lots of RAM. Due to these requirements I'm often renting bare metal servers as opposed to VPS's as they cost less.

The thing these servers often come with is large hard drives. I think combined across all my servers I have 15-25TB free. So I did look into Siacoin. But to start offering storage on the network you have to first purchase Siacoin yourself.

To me that felt a bit like a pyramid scheme, buying coins I don't need or want just to offer my storage.. and to be honest it was quite complicated just to buy some they don't make it easy.

So I gave up on that and I tried Storj instead which is Siacoin's main rival? But they have a different problem, an abundance of storage but no one utilising it so you can't make much money from it even if you're making a lot of storage available.

What I feel this area is missing is a Bitcoin. They need one really big storage network to make people realise these things even exist and start using them. It's worthless if there's no one willing to store their bits. So if Filecoin can do it with their huge investments then I say more power to them. I'll use whichever one can pay, even if it only offset 2% of my server hosting costs that'd be better than zero.

In contrast, Sia is designed for hosts with uptimes in the 95- to 98-percent range. Data is spread across many servers in a way that allows it to be re-constructed even if a few of them fail. And that means Sia hosts don't have to spend a lot of money on redundant power supplies or 24/7 support. Vorick says that makes running a Sia storage service radically cheaper.

Why would Amazon not be able to do this? They have lots and lots of servers, so they could spread out the data in the same way, could they not?

This seems to be the only advantage of this storage system amidst many disadvantages.

I guess the argument is that I should trust a single behemoth like Amazon less than I should trust an arbitrary number of nameless, faceless on-the-cheap suppliers on the premise that a nebulous algorithm that I (the average user) don't totally understand will stochastically cause those suppliers to lose their contract if they lose too much data, but that's okay because a different nebulous algorithm I don't totally understand can reconstruct the data as long as most of those nameless, faceless suppliers are on the up-and-up, all on the fly and completely decentralized?

In contrast, Sia is designed for hosts with uptimes in the 95- to 98-percent range. Data is spread across many servers in a way that allows it to be re-constructed even if a few of them fail. And that means Sia hosts don't have to spend a lot of money on redundant power supplies or 24/7 support. Vorick says that makes running a Sia storage service radically cheaper.

Why would Amazon not be able to do this? They have lots and lots of servers, so they could spread out the data in the same way, could they not?

This seems to be the only advantage of this storage system amidst many disadvantages.

I guess the argument is that I should trust a single behemoth like Amazon less than I should trust an arbitrary number of nameless, faceless on-the-cheap suppliers on the premise that a nebulous algorithm that I (the average user) don't totally understand will stochastically cause those suppliers to lose their contract if they lose too much data, but that's okay because a different nebulous algorithm I don't totally understand can reconstruct the data as long as most of those nameless, faceless suppliers are on the up-and-up, all on the fly and completely decentralized?

Yeah, sure, sign me up. What could possibly go wrong?

I have to hope that "Alt-Storage" like this, when utilized by companies and organizations, is just a -part- of their backup and file storage needs. I could see looking at things like this as a way to insulate yourself from a massive failure of a big provider like Amazon or what not...but it certainly would NEVER be my sole method.

I feel like the title "Investors poured millions into a storage network that doesn’t exist" is missing a "yet," like the similar "Investors paid millions for a cryptocurrency that doesn’t exist yet" header later in the article.

When I first saw the headline, I thought it was an article about a scam, a company that had said they had a storage network when they really didn't. This isn't a scam.... yet.

Way too much $$$ in investors hands and they are throwing at every idea knowing all too well even if doesn't succed they will make a killing because of early valuations. In mean time most of small businesses with good bottomlines in middle America are struggling to get few hundred thousand from banks...

I have to hope that "Alt-Storage" like this, when utilized by companies and organizations, is just a -part- of their backup and file storage needs. I could see looking at things like this as a way to insulate yourself from a massive failure of a big provider like Amazon or what not...but it certainly would NEVER be my sole method.

Yeah, it seems like, at least initially, it would be prudent to maybe make Filecoin the third backup method, after local backups and online backups with a more proven service. If it starts off significantly cheaper because of people like Vicey putting up some spare storage to make a little side cash, it could make sense as an extra layer of redundancy.

In contrast, Sia is designed for hosts with uptimes in the 95- to 98-percent range. Data is spread across many servers in a way that allows it to be re-constructed even if a few of them fail. And that means Sia hosts don't have to spend a lot of money on redundant power supplies or 24/7 support. Vorick says that makes running a Sia storage service radically cheaper.

Why would Amazon not be able to do this? They have lots and lots of servers, so they could spread out the data in the same way, could they not?

This seems to be the only advantage of this storage system amidst many disadvantages.

I think it might be inherently difficult for a big company to be as scrappy as a market of smaller companies, especially if the market is global. Amazon is a US company paying mostly US rents and US salaries. It's easy to imagine a Chinese company with low overhead and ready access to Shenzhen hardware offering prices that no American company can beat.

Also, there are some characteristics of the network that Amazon can't replicate easily. For example, for legal or logistical reasons Amazon may not want to have a physical presence in too many countries, but Sia hosts can be anywhere. So you can get broader redundancy from a blockchain storage network.

All that said, I think it's very possible that the apparent price gap will narrow a lot as Sia matures and Amazon continues to cut prices.

I have to hope that "Alt-Storage" like this, when utilized by companies and organizations, is just a -part- of their backup and file storage needs. I could see looking at things like this as a way to insulate yourself from a massive failure of a big provider like Amazon or what not...but it certainly would NEVER be my sole method.

Sure, that's totally fair, but...

If some event simultaneously takes down our local storage and our offsite Amazon storage that is hosted, I dunno, almost surely tens of miles away, it's probably a business-ending event for a whole lot of shops no matter if the data could eventually be recovered.

I'm not saying there's no use for a distributed fourth-party online backup, but it seems like a pretty fringe use and I wouldn't dedicate (as the article suggests) ~10% of my total offsite resources on it. Even if it worked and I trusted it, which it currently doesn't and I don't.

I feel like the title "Investors poured millions into a storage network that doesn’t exist" is missing a "yet," like the similar "Investors paid millions for a cryptocurrency that doesn’t exist yet" header later in the article.

When I first saw the headline, I thought it was an article about a scam, a company that had said they had a storage network when they really didn't. This isn't a scam.... yet.

That is a fair point. I left the "yet" off because we try to keep headlines under 70 characters but I have gone ahead and put it in for maximum accuracy.

I think it might be inherently difficult for a big company to be as scrappy as a market of smaller companies, especially if the market is global. Amazon is a US company paying mostly US rents and US salaries. It's easy to imagine a Chinese company with low overhead and ready access to Shenzhen hardware offering prices that no American company can beat.

Also, there are some characteristics of the network that Amazon can't replicate easily. For example, for legal or logistical reasons Amazon may not want to have a physical presence in too many countries, but Sia hosts can be anywhere. So you can get broader redundancy from a blockchain storage network.

"We'll spread the data ever more broadly across tens or a hundred countries" does not fill me with confidence that under/non-performing suppliers could be quickly or easily jettisoned according to local laws.

I don't even mean that in a nefarious sense -- it's hard to simultaneously do business in dozens of countries with trustworthy and dependable legal systems, even if you're a industrial monster like Boeing who has a thousand lawyers and works almost exclusively long-lead projects. Introduce legal systems that are less trustworthy and dependable, and contracts that are ephemerally separable?

I have to hope that "Alt-Storage" like this, when utilized by companies and organizations, is just a -part- of their backup and file storage needs. I could see looking at things like this as a way to insulate yourself from a massive failure of a big provider like Amazon or what not...but it certainly would NEVER be my sole method.

Sure, that's totally fair, but...

If some event simultaneously takes down our local storage and our offsite Amazon storage that is hosted, I dunno, almost surely tens of miles away, it's probably a business-ending event for a whole lot of shops no matter if the data could eventually be recovered.

I'm not saying there's no use for a distributed fourth-party online backup, but it seems like a pretty fringe use and I wouldn't dedicate (as the article suggests) ~10% of my total offsite resources on it. Even if it worked and I trusted it, which it currently doesn't and I don't.

But fools and their money, as they say.

Hey, I was in another article arguing why TAPE still has a place in a DR plan, so I'm a little old school in that regard

I like having as many DR options as budget allows, so I'll take whatever is available that I can afford and put it there.

With that in mind....I have NO idea how they can guarantee any SLAs when they don't theoretically control their equipment. That would make me quite nervous.

In contrast, Sia is designed for hosts with uptimes in the 95- to 98-percent range. Data is spread across many servers in a way that allows it to be re-constructed even if a few of them fail. And that means Sia hosts don't have to spend a lot of money on redundant power supplies or 24/7 support. Vorick says that makes running a Sia storage service radically cheaper.

Why would Amazon not be able to do this? They have lots and lots of servers, so they could spread out the data in the same way, could they not?

This seems to be the only advantage of this storage system amidst many disadvantages.

Amazon, Google, Microsoft... any of the big players in cloud storage can be one-stop shops with a trusted name not relying on the hocus pocus of a market built on the speculation value of cryptocurrency. Seriously, what value does dealing with cryptocurrency add to the process of storing your data? Customers should be able to not care about the technology you're using to store your data except to be assured that they'll get their data back when they want it.

What happens to Filecoin and Sia if there's a crypto-currency crash, which seem inevitable in any market built on speculation?

What happens to your data then? Do service providers just turn off their servers and reformat their drives because their collateral is no longer worth anything? Or do they just start charging dollars for their bits?

In contrast, Sia is designed for hosts with uptimes in the 95- to 98-percent range. Data is spread across many servers in a way that allows it to be re-constructed even if a few of them fail. And that means Sia hosts don't have to spend a lot of money on redundant power supplies or 24/7 support. Vorick says that makes running a Sia storage service radically cheaper.

Why would Amazon not be able to do this? They have lots and lots of servers, so they could spread out the data in the same way, could they not?

This seems to be the only advantage of this storage system amidst many disadvantages.

I guess the argument is that I should trust a single behemoth like Amazon less than I should trust an arbitrary number of nameless, faceless on-the-cheap suppliers on the premise that a nebulous algorithm that I (the average user) don't totally understand will stochastically cause those suppliers to lose their contract if they lose too much data, but that's okay because a different nebulous algorithm I don't totally understand can reconstruct the data as long as most of those nameless, faceless suppliers are on the up-and-up, all on the fly and completely decentralized?

Yeah, sure, sign me up. What could possibly go wrong?

I have to hope that "Alt-Storage" like this, when utilized by companies and organizations, is just a -part- of their backup and file storage needs. I could see looking at things like this as a way to insulate yourself from a massive failure of a big provider like Amazon or what not...but it certainly would NEVER be my sole method.

To minimize the risk of disruption, Netflix has built a series of tools with names like “Chaos Monkey,” which randomly takes virtual machines offline to make sure Netflix can survive failures without harming customers. Netflix’s “Simian Army” ramped up with Chaos Gorilla (which disables an entire Amazon availability zone) and Chaos Kong (which simulates an outage affecting an entire Amazon region and shifts workloads to other regions).

Amazon’s cloud network is spread across 12 regions worldwide, each of which has availability zones consisting of one or more data centers. Netflix operates primarily in the Northern Virginia, Oregon, and Dublin regions, but if an entire region goes down, “we can instantaneously redirect the traffic to the other available ones,” Izrailevsky said. "It's not that uncommon for us to fail over across regions for various reasons."

Quote:

What if all of Netflix's systems in Amazon went down? Netflix keeps backups of everything in Google Cloud Storage in case of a natural disaster, a self-inflicted failure that somehow takes all of Netflix's systems down, or a “catastrophic security breach that might affect our entire AWS deployment,” Izrailevsky said. “We've never seen a situation like this and we hope we never will.”

But Netflix would be ready in part thanks to a system it calls “Armageddon Monkey,” which simulates failure of all of Netflix’s systems on Amazon.

I think the correct words are "crazy prepared", and I'm not sure blockchain storage could really compete.

Giant funding before proof of concept hasn't worked for any other block-chain product yet, so I don't see why it would here. I also don't like the idea of my data being stored by anonymous persons located across the globe, that are nearly untraceable.

And lower cost? There's so much overhead that I can't see that even being a possibility. Have you seen how cheap low-availability storage is with the big providers? (Amazon, Microsoft, Rackspace)

I think it might be inherently difficult for a big company to be as scrappy as a market of smaller companies, especially if the market is global. Amazon is a US company paying mostly US rents and US salaries. It's easy to imagine a Chinese company with low overhead and ready access to Shenzhen hardware offering prices that no American company can beat.

Also, there are some characteristics of the network that Amazon can't replicate easily. For example, for legal or logistical reasons Amazon may not want to have a physical presence in too many countries, but Sia hosts can be anywhere. So you can get broader redundancy from a blockchain storage network.

"We'll spread the data ever more broadly across tens or a hundred countries" does not fill me with confidence that under/non-performing suppliers could be quickly or easily jettisoned according to local laws.

I don't even mean that in a nefarious sense -- it's hard to simultaneously do business in dozens of countries with trustworthy and dependable legal systems, even if you're a industrial monster like Boeing who has a thousand lawyers and works almost exclusively long-lead projects. Introduce legal systems that are less trustworthy and dependable, and contracts that are ephemerally separable?

This is a bug, not a feature.

I thought that for practical reasons server farms were located where power is cheap and internet connections are fast and cheap, giving the USA an advantage. Is that not true?

The fact that you have to use their own currency vs something more fungible (bitcoin) makes it smell like a scam

That makes sense but having a distinct cryptocurrency is pretty fundamental to the design. The network needs to be able to reward and penalize hosts on-chain, and it can only do that in the blockchain's native currency.

I have a whole bunch of servers I rent because I need high CPU performance and lots of RAM. Due to these requirements I'm often renting bare metal servers as opposed to VPS's as they cost less.

The thing these servers often come with is large hard drives. I think combined across all my servers I have 15-25TB free. So I did look into Siacoin. But to start offering storage on the network you have to first purchase Siacoin yourself.

To me that felt a bit like a pyramid scheme, buying coins I don't need or want just to offer my storage.. and to be honest it was quite complicated just to buy some they don't make it easy.

So I gave up on that and I tried Storj instead which is Siacoin's main rival? But they have a different problem, an abundance of storage but no one utilising it so you can't make much money from it even if you're making a lot of storage available.

What I feel this area is missing is a Bitcoin. They need one really big storage network to make people realise these things even exist and start using them. It's worthless if there's no one willing to store their bits. So if Filecoin can do it with their huge investments then I say more power to them. I'll use whichever one can pay, even if it only offset 2% of my server hosting costs that'd be better than zero.

Sia's requirement that you purchase coin before you can store is the kinda thing that usually does (and should) set off a few mental warnings that something is up. But when you look into it in more detail it does make some sense. It's down to the way the contracts work - if the storage host fails their checks they don't just not get your money they loose some of their own money.

It's a weird setup for a network that wants to assemble unused distributed storage. If I have unused storage I want the ability to suddenly use it when I need it. But with Sia you can't do that because you'll actually loose money. I'd be willing to offer up my spare storage for some profit if I never end up using said storage - but not if I risk actually losing money in the process. So from that perspective the payment model they use isn't suited to utilising spare storage on average Joe's machine.

Isn't this basically the plot of the most recent season of Silicon Valley?

They're only missing the "Suck it Jin Yang" smart fridges

I was showing my wife one of those at the local Lowes store and I made it display a Budweiser ad on the door of the fridge before we walked off.

I thought that was funny at the time, but now I'm thinking a Sears ad would have been better. I thought about making it display porn but that probably would have helped them sell that shit.

Ha. Brings back memories of a local department store that had a gift registry on a touch screen system back in the day (2000-2001?). If you clicked at the extreme bottom, out of visible range on the monitor - but still registered on the touch screen - you could bring up the Start menu.

From there, well....havoc. Usual routine was to bring up MS Paint and make vulgar stick figures, then go into the touch screen settings and make it so the pointer clicked 4 inches from where you wanted so you couldn't close the paint window without actually opening up the kiosk.

"We'll spread the data ever more broadly across tens or a hundred countries" does not fill me with confidence that under/non-performing suppliers could be quickly or easily jettisoned according to local laws.

I don't even mean that in a nefarious sense -- it's hard to simultaneously do business in dozens of countries with trustworthy and dependable legal systems, even if you're a industrial monster like Boeing who has a thousand lawyers and works almost exclusively long-lead projects. Introduce legal systems that are less trustworthy and dependable, and contracts that are ephemerally separable?

This is a bug, not a feature.

This is the point of Sia's automatic contract-enforcement feature. The blockchain detects when providers break their promises and automatically provides refunds and takes the provider's collateral. So legally speaking it's irrelevant what country the parties are in. Even if one of the parties wanted to sue the other, there'd be no one with the authority to enforce judgments, since Sia uses a decentralized Bitcoin-like process to manage the blockchain.

I have a whole bunch of servers I rent because I need high CPU performance and lots of RAM. Due to these requirements I'm often renting bare metal servers as opposed to VPS's as they cost less.

The thing these servers often come with is large hard drives. I think combined across all my servers I have 15-25TB free. So I did look into Siacoin. But to start offering storage on the network you have to first purchase Siacoin yourself.

To me that felt a bit like a pyramid scheme, buying coins I don't need or want just to offer my storage.. and to be honest it was quite complicated just to buy some they don't make it easy.

So I gave up on that and I tried Storj instead which is Siacoin's main rival? But they have a different problem, an abundance of storage but no one utilising it so you can't make much money from it even if you're making a lot of storage available.

What I feel this area is missing is a Bitcoin. They need one really big storage network to make people realise these things even exist and start using them. It's worthless if there's no one willing to store their bits. So if Filecoin can do it with their huge investments then I say more power to them. I'll use whichever one can pay, even if it only offset 2% of my server hosting costs that'd be better than zero.

Sia's requirement that you purchase coin before you can store is the kinda thing that usually does (and should) set off a few mental warnings that something is up. But when you look into it in more detail it does make some sense. It's down to the way the contracts work - if the storage host fails their checks they don't just not get your money they loose some of their own money.

It's a weird setup for a network that wants to assemble unused distributed storage. If I have unused storage I want the ability to suddenly use it when I need it. But with Sia you can't do that because you'll actually loose money. I'd be willing to offer up my spare storage for some profit if I never end up using said storage - but not if I risk actually losing money in the process. So from that perspective the payment model they use isn't suited to utilising spare storage on average Joe's machine.

You're still forking over actual currency for their funny money before you even get anything. It's still a scam. A convoluted, electricity wasting scam.

In contrast, Sia is designed for hosts with uptimes in the 95- to 98-percent range. Data is spread across many servers in a way that allows it to be re-constructed even if a few of them fail. And that means Sia hosts don't have to spend a lot of money on redundant power supplies or 24/7 support. Vorick says that makes running a Sia storage service radically cheaper.

Why would Amazon not be able to do this? They have lots and lots of servers, so they could spread out the data in the same way, could they not?

This seems to be the only advantage of this storage system amidst many disadvantages.

Amazon, Google, Microsoft... any of the big players in cloud storage can be one-stop shops with a trusted name not relying on the hocus pocus of a market built on the speculation value of cryptocurrency. Seriously, what value does dealing with cryptocurrency add to the process of storing your data? Customers should be able to not care about the technology you're using to store your data except to be assured that they'll get their data back when they want it.

What happens to Filecoin and Sia if there's a crypto-currency crash, which seem inevitable in any market built on speculation?

What happens to your data then? Do service providers just turn off their servers and reformat their drives because their collateral is no longer worth anything? Or do they just start charging dollars for their bits?

That's the main thing that they need to ensure. That their storage currency market exchange rate stays stable relative to most 'real' currencies like $, £ etc. Anything else (like other crypto's) are too variable and as you rightly say can leave the storage provider with a contract that was worth 2$ at the start suddenly worth $0.00001 at the end where they are better wiping the drive and selling second hand on ebay...

Why would Amazon not be able to do this? They have lots and lots of servers, so they could spread out the data in the same way, could they not?

This seems to be the only advantage of this storage system amidst many disadvantages.

I think it might be inherently difficult for a big company to be as scrappy as a market of smaller companies, especially if the market is global. ...

Internally I understand Amazon IS actually structured as a conglomerate of small scrappy companies. Read some of Ben Thompsons writing on it at stratechery.com to learn more.

Quote:

Also, there are some characteristics of the network that Amazon can't replicate easily. For example, for legal or logistical reasons Amazon may not want to have a physical presence in too many countries, but Sia hosts can be anywhere. So you can get broader redundancy from a blockchain storage network.

On the other side there are plenty of regulatory reasons why you don't want to store data in random countries. Europe doesn't like it when european personal data is stored in nations with worse data protection. Russia and China tend to insist that data on their citizens is stored inside their borders. Companies *have* to know where their data is stored.